j2 Reports Second Quarter 2017 Results

LOS ANGELES--(BUSINESS WIRE)--
j2 Global, Inc. (NASDAQ: JCOM) today reported financial results for the
second quarter ended June 30, 2017 and announced that its Board of
Directors has declared an increased quarterly cash dividend of $0.3850
per share.

SECOND QUARTER 2017 RESULTS

Q2 2017 quarterly revenues increased 29.0% to an all-time record of
$273.2 million compared to $211.8 million for Q2 2016.

Net cash provided by operating activities decreased by 10.4% to $60.5
million compared to $67.5 millionfor Q2 2016. This decrease
was driven by a $20.0 million contingent payment for Ookla which was
paid during the quarter.

Free cash flow(1) for the quarter increased by 12.0% to
$71.1 million compared to $63.5 million for Q2 2016 before the effect
of the $20.0 million contingent payment for Ookla which was paid
during the quarter.

GAAP net income decreased by 7.1% to $31.4 million compared to $33.8
million for Q2 2016.

Adjusted EBITDA(4) for the quarter increased 13.0% to
$110.2 million compared to $97.5 million for Q2 2016.

j2 ended the quarter with approximately $330.8 million in cash and
investments after deploying approximately $52.0 million during the
quarter for acquisitions and j2's regular quarterly dividend.

Key financial results for Q2 2017 versus Q2 2016 are set forth in the
following table (in millions, except per share amounts). Reconciliations
of Adjusted non-GAAP earnings per diluted share, Adjusted EBITDA and
free cash flow to their nearest comparable GAAP financial measures are
attached to this Press Release.

Q2 2017

Q2 2016

% Change

Revenues

Cloud Services

$143.4 million

$141.4 million

1.4%

Digital Media

$128.5 million

$69.3 million

85.4%

IP Licensing

$1.3 million

$1.1 million

18.2%

Total Revenue:

$273.2 million

$211.8 million

29.0%

Operating Income

$58.6 million

$58.9 million

(0.5)%

Net Cash Provided by Operating Activities

$60.5 million

$67.5 million

(10.4)%

Free Cash Flow (1)

$71.1 million

$63.5 million

12.0%

GAAP Earnings per Diluted Share (2)

$0.63

$0.69

(8.7)%

Adjusted Non-GAAP Earnings per Diluted Share (2) (3)

$1.33

$1.21

9.9%

GAAP Net Income

$31.4 million

$33.8 million

(7.1)%

Non-GAAP Net Income

$64.8 million

$59.7 million

8.5%

Adjusted EBITDA (4)

$110.2 million

$97.5 million

13.0%

Adjusted EBITDA Margin (4)

40.3%

46.0%

(5.7)%

"I am very happy to report another quarter of record revenues totaling
more than $273 million in the quarter, a 29% increase over the same
quarter last year," said Hemi Zucker, CEO of j2. "In addition, our
business was further validated by the debt market as our Cloud Services
division issued $650 million of 8-year notes in an oversubscribed
offering without guarantees from either our Media division or parent
company, j2 Global. The debt raise both lowered our overall long-term
cost of capital and increased cash on hand as of today to over $380
million."

BUSINESS OUTLOOK

For fiscal 2017, the Company reaffirms estimates that it will achieve
revenues between $1.130 billion and $1.170 billion and Adjusted non-GAAP
earnings per diluted share of between $5.60 and $6.00.

Adjusted non-GAAP earnings per diluted share for 2017 excludes
share-based compensation of between $17 and $19 million, amortization of
acquired intangibles and the impact of any currently unanticipated
items, in each case net of tax.

It is anticipated that the non-GAAP effective tax rate for 2017
(exclusive of the release of reserves for uncertain tax positions) will
be between 28.5% and 30.5%.

The Company has not reconciled the Adjusted non-GAAP earnings per
diluted share and tax rate guidance included in this release to the most
directly comparable GAAP measure because this cannot be done without
unreasonable effort due to the variability with respect to costs related
to acquisitions and taxation, which are potential adjustments to future
earnings. We expect the variability of these items to have a potentially
unpredictable and significant impact on our future GAAP financial
results.

DIVIDEND

j2's Board of Directors approved a quarterly cash dividend of $0.3850
per common share, a $0.01, or 2.7% increase versus last quarter's
dividend. This is j2's twenty-fourth consecutive quarterly dividend
increase since its first quarterly dividend in September 2011. The
dividend will be paid on September 1, 2017 to all shareholders of record
as of the close of business on August 14, 2017. Future dividends will be
subject to Board approval.

Notes:

(1)

Free cash flow is defined as net cash provided by operating
activities, less purchases of property, plant and equipment, plus
excess tax benefit from share-based compensation. Free cash flow
amounts are not meant as a substitute for GAAP, but are solely for
informational purposes.

(2)

The estimated GAAP effective tax rates were approximately 22.8% for
Q2 2017 and 30.9% for Q2 2016. The estimated Adjusted non-GAAP
effective tax rates were approximately 28.5% for Q2 2017 and 29.4%
for Q2 2016.

Adjusted EBITDA is defined as earnings before interest and other
expense, net; income tax expense; depreciation and amortization; and
the items used to reconcile EPS to Adjusted non-GAAP EPS referred to
in Note (3) above. Adjusted EBITDA amounts are not meant as a
substitute for GAAP, but are solely for informational purposes.

"Safe Harbor" Statement Under the Private Securities Litigation Reform
Act of 1995: Certain statements in this Press Release are
"forward-looking statements" within the meaning of The Private
Securities Litigation Reform Act of 1995, particularly those contained
in Hemi Zucker's quote and the "Business Outlook" portion regarding the
Company's expected fiscal 2017 financial performance. These
forward-looking statements are based on management's current
expectations or beliefs and are subject to numerous assumptions, risks
and uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. These factors
and uncertainties include, among other items: the Company's ability to
grow non-fax revenues, profitability and cash flows; the Company's
ability to identify, close and successfully transition acquisitions;
subscriber growth and retention; variability of the Company's revenue
based on changing conditions in particular industries and the economy
generally; protection of the Company's proprietary technology or
infringement by the Company of intellectual property of others; the risk
of adverse changes in the U.S. or international regulatory environments,
including but not limited to the imposition or increase of taxes or
regulatory-related fees; and the numerous other factors set forth in j2
Global's filings with the Securities and Exchange Commission ("SEC").
For a more detailed description of the risk factors and uncertainties
affecting j2 Global, refer to the 2016 Annual Report on Form 10-K filed
by j2 Global on March 1, 2017, and the other reports filed by j2 Global
from time-to-time with the SEC, each of which is available at www.sec.gov.
The forward-looking statements provided in this press release and
particularly those contained in Hemi Zucker's quote and the "Business
Outlook" portion regarding the Company's expected fiscal 2017 financial
performance are based on limited information available to the Company at
this time, which is subject to change. Although management's
expectations may change after the date of this press release, the
Company undertakes no obligation to revise or update these statements.

About non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared
and presented in accordance with GAAP, we use the following Adjusted
non-GAAP financial measures: Adjusted non-GAAP net income, Adjusted
non-GAAP earnings per diluted share, Adjusted EBITDA and free cash flow.
The presentation of this financial information is not intended to be
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with GAAP.

We use these Adjusted non-GAAP financial measures for financial and
operational decision-making and as a means to evaluate period-to-period
comparisons. Our management believes that these Adjusted non-GAAP
financial measures provide meaningful supplemental information regarding
our performance and liquidity by excluding certain expenses and
expenditures that may not be indicative of our recurring core business
operating results. We believe that both management and investors benefit
from referring to these Adjusted non-GAAP financial measures in
assessing our performance and when planning, forecasting, and analyzing
future periods. These Adjusted non-GAAP financial measures also
facilitate management's internal comparisons to our historical
performance and liquidity. We believe these Adjusted non-GAAP financial
measures are useful to investors both because (1) they allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision-making and (2) they are used by our
institutional investors and the analyst community to help them analyze
the health of our business.

For more information on these Adjusted non-GAAP financial measures,
please see the appropriate GAAP to Adjusted non-GAAP reconciliation
tables included within the attached Exhibit to this release.

j2 GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED, IN THOUSANDS)

June 30, 2017

December 31, 2016

ASSETS

Cash and cash equivalents

$

330,743

$

123,950

Restricted cash

265,000

—

Short-term investments

65

60

Accounts receivable, net of allowances of $9,027 and $7,988,
respectively

j2 GLOBAL, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP
TO ADJUSTED NON-GAAP FINANCIAL MEASURESTHREE AND SIX MONTHS
ENDED JUNE 30, 2017 AND 2016(UNAUDITED, IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)

Non-GAAP net income is GAAP net income with the following modifications,
net of tax: (1) elimination of share-based compensation and the
associated payroll tax expense; (2) elimination of certain
acquisition-related integration costs; (3) elimination of interest costs
in excess of the coupon rate associated with the convertible notes; (4)
elimination of amortization of patents and intangible assets that we
acquired; (5) elimination of additional tax or indirect tax related
(expense) benefit from prior years; and (6) dilutive effect of the
convertible debt.

Three Months Ended June 30,

2017

Per Diluted Share *

2016

Per Diluted Share *

Net income

$

31,376

$

0.63

$

33,770

$

0.69

Plus:

Share based compensation (1)

3,329

0.07

2,520

0.05

Acquisition related integration costs (2)

4,966

0.10

2,583

0.05

Interest costs (3)

2,030

0.04

1,361

0.03

Amortization (4)

21,031

0.44

19,322

0.40

Tax expense from prior years (5)

2,058

0.04

99

(0.00

)

Convertible debt dilution (6)

—

0.02

—

—

Adjusted non-GAAP net income

$

64,790

$

1.33

$

59,655

$

1.21

Six Months Ended June 30,

2017

Per Diluted Share *

2016

Per Diluted Share *

Net income

$

57,196

$

1.16

$

63,713

$

1.30

Plus:

Share based compensation (1)

5,753

0.12

4,572

0.09

Acquisition related integration costs (2)

10,891

0.23

4,365

0.09

Interest costs (3)

3,295

0.07

2,694

0.06

Amortization (4)

43,365

0.91

35,640

0.74

Tax expense from prior years (5)

2,058

0.04

52

0.00

Convertible debt dilution (6)

—

0.03

—

—

Adjusted non-GAAP net income

$

122,558

$

2.52

$

111,036

$

2.25

* The reconciliation of net income per share from GAAP to
Adjusted non-GAAP may not foot since each is calculated independently.

Non-GAAP net income is GAAP net income with the following modifications:
(1) elimination of share-based compensation and the associated payroll
tax expense; (2) elimination of certain acquisition-related integration
costs; (3) elimination of interest costs in excess of the coupon rate
associated with the convertible notes; (4) elimination of amortization
of patents and intangible assets that we acquired; (5) elimination of
additional tax or indirect tax related (expense) benefit from prior
years; and (6) dilutive effect of the convertible debt.

Three Months Ended June 30,

2017

2016

Cost of revenues

$

43,159

$

35,591

Plus:

Share based compensation (1)

(121

)

(103

)

Amortization (4)

(639

)

(1,311

)

Adjusted non-GAAP cost of revenues

$

42,399

$

34,177

Sales and marketing

$

80,862

$

48,617

Plus:

Share based compensation (1)

(521

)

(434

)

Acquisition related integration costs (2)

(1,033

)

(581

)

Adjusted non-GAAP sales and marketing

$

79,308

$

47,602

Research, development and engineering

$

11,555

$

9,213

Plus:

Share based compensation (1)

(281

)

(221

)

Acquisition related integration costs (2)

(248

)

—

Adjusted non-GAAP research, development and engineering

$

11,026

$

8,992

General and administrative

$

79,038

$

59,434

Plus:

Share based compensation (1)

(4,639

)

(2,681

)

Acquisition related integration costs (2)

(1,884

)

(3,371

)

Amortization (4)

(32,077

)

(24,868

)

Tax expense from prior years (5)

(3,007

)

(150

)

Adjusted non-GAAP general and administrative

$

37,431

$

28,364

Interest expense, net

$

13,670

$

10,301

Plus:

Interest costs (3)

(2,859

)

(1,913

)

Adjusted non-GAAP interest expense, net

$

10,811

$

8,388

Other expense (income), net

$

4,227

$

(213

)

Plus:

Acquisition related integration costs (2)

(2,635

)

—

Adjusted non-GAAP other expense (income), net

$

1,592

$

(213

)

Income tax provision

$

9,287

$

15,087

Plus:

Share based compensation (1)

2,233

919

Acquisition related integration costs (2)

834

1,369

Interest costs (3)

829

552

Amortization (4)

11,685

6,857

Tax expense from prior years (5)

949

51

Adjusted non-GAAP income tax provision

$

25,817

$

24,835

Total adjustments

$

(33,414

)

$

(25,885

)

GAAP earnings per diluted share

$

0.63

$

0.69

Adjustments *

$

0.70

$

0.53

Adjusted non-GAAP earnings per diluted share

$

1.33

$

1.21

* The reconciliation of net income per share from GAAP to
Adjusted non-GAAP may not foot since each is calculated independently.

The Company discloses Adjusted non-GAAP Earnings Per Share ("EPS") as a
supplemental non-GAAP financial performance measure, as it believes it
is a useful metric by which to compare the performance of its business
from period to period. The Company also understands that this Adjusted
non-GAAP measure is broadly used by analysts, rating agencies and
investors in assessing the Company's performance. Accordingly, the
Company believes that the presentation of this Adjusted non-GAAP
financial measure provides useful information to investors.

Adjusted non-GAAP EPS is not in accordance with, or an alternative to,
net income per share and may be different from non-GAAP measures with
similar or even identical names used by other companies. In addition,
this Adjusted non-GAAP measure is not based on any comprehensive set of
accounting rules or principles. This Adjusted non-GAAP measure has
limitations in that it does not reflect all of the amounts associated
with the Company's results of operations determined in accordance with
GAAP.

Non-GAAP net income is GAAP net income with the following modifications:
(1) elimination of share-based compensation and the associated payroll
tax expense; (2) elimination of certain acquisition-related integration
costs; (3) elimination of interest costs in excess of the coupon rate
associated with the convertible notes; (4) elimination of amortization
of patents and intangible assets that we acquired; (5) elimination of
additional tax or indirect tax related (expense) benefit from prior
years; and (6) dilutive effect of the convertible debt.

Six Months Ended June 30,

2017

2016

Cost of revenues

$

83,969

$

69,878

Plus:

Share based compensation (1)

(238

)

(198

)

Acquisition related integration costs (2)

(195

)

—

Amortization (4)

(1,758

)

(2,555

)

Adjusted non-GAAP cost of revenues

$

81,778

$

67,125

Sales and marketing

$

158,339

$

96,729

Plus:

Share based compensation (1)

(899

)

(965

)

Acquisition related integration costs (2)

(2,471

)

(1,124

)

Adjusted non-GAAP sales and marketing

$

154,969

$

94,640

Research, development and engineering

$

23,307

$

18,201

Plus:

Share based compensation (1)

(518

)

(428

)

Acquisition related integration costs (2)

(825

)

—

Adjusted non-GAAP research, development and engineering

$

21,964

$

17,773

General and administrative

$

155,693

$

115,211

Plus:

Share based compensation (1)

(7,522

)

(4,657

)

Acquisition related integration costs (2)

(8,287

)

(5,422

)

Amortization (4)

(62,934

)

(45,925

)

Tax expense from prior years (5)

(3,007

)

(900

)

Adjusted non-GAAP general and administrative

$

73,943

$

58,307

Interest expense, net

$

26,079

$

20,534

Plus:

Interest costs (3)

(4,889

)

(3,798

)

Adjusted non-GAAP interest expense, net

$

21,190

$

16,736

Other expense (income), net

$

4,551

$

(87

)

Plus:

Acquisition related integration costs (2)

(2,635

)

—

Tax benefit from prior years (5)

—

811

Adjusted non-GAAP other expense (income), net

$

1,916

$

724

Income tax provision

$

18,709

$

28,123

Plus:

Share based compensation (1)

3,424

1,676

Acquisition related integration costs (2)

3,522

2,181

Interest costs (3)

1,594

1,104

Amortization (4)

21,327

12,840

Tax expense from prior years (5)

949

37

Adjusted non-GAAP income tax provision

$

49,525

$

45,961

Total adjustments

$

(65,362

)

$

(47,323

)

GAAP earnings per diluted share

$

1.16

$

1.30

Adjustments *

$

1.36

$

0.95

Adjusted non-GAAP earnings per diluted share

$

2.52

$

2.25

* The reconciliation of net income per share from GAAP to
Adjusted non-GAAP may not foot since each is calculated independently.

The Company discloses Adjusted non-GAAP Earnings Per Share ("EPS") as a
supplemental non-GAAP financial performance measure, as it believes it
is a useful metric by which to compare the performance of its business
from period to period. The Company also understands that this Adjusted
non-GAAP measure is broadly used by analysts, rating agencies and
investors in assessing the Company's performance. Accordingly, the
Company believes that the presentation of this Adjusted non-GAAP
financial measure provides useful information to investors.

Adjusted non-GAAP EPS is not in accordance with, or an alternative to,
net income per share and may be different from non-GAAP measures with
similar or even identical names used by other companies. In addition,
this Adjusted non-GAAP measure is not based on any comprehensive set of
accounting rules or principles. This Adjusted non-GAAP measure has
limitations in that it does not reflect all of the amounts associated
with the Company's results of operations determined in accordance with
GAAP.

Non-GAAP Financial Measures

To supplement its condensed consolidated financial statements, which are
prepared and presented in accordance with US GAAP, the Company uses the
following Non-GAAP financial measures: Adjusted EBITDA, Adjusted
non-GAAP net income, and Adjusted non-GAAP diluted EPS (collectively the
"Non-GAAP financial measures"). The presentation of this financial
information is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared and
presented in accordance with U.S. GAAP. The Company uses these Non-GAAP
financial measures for financial and operational decision making and as
a means to evaluate period-to-period comparisons. The Company believes
that they provide useful information about core operating results,
enhance the overall understanding of past financial performance and
future prospects, and allow for greater transparency with respect to key
metrics used by management in its financial and operational decision
making.

(1) Share Based Compensation. The Company excludes stock-based
compensation because it is non-cash in nature and because the Company
believes that the Non-GAAP financial measures excluding this item
provide meaningful supplemental information regarding operational
performance. The Company further believes this measure is useful to
investors in that it allows for greater transparency to certain line
items in its financial statements. In addition, excluding this item from
the Non-GAAP measures facilitates comparisons to historical operating
results and comparisons to peers, many of which similarly exclude this
item.

(2) Acquisition Related Integration Costs. The Company excludes
certain acquisition and related integration costs such as severance,
lease terminations, retention bonuses and other acquisition-specific
items. The Company believes that the Non-GAAP financial measures
excluding this item provide meaningful supplemental information
regarding operational performance. In addition, excluding this item from
the Non-GAAP measures facilitates comparisons to historical operating
results and comparisons to peers, many of which similarly exclude this
item.

(3) Interest Costs. In June 2014, the Company issued $402.5
million aggregate principal amount of 3.25% convertible senior notes. In
accordance with GAAP, the Company separately accounts for the value of
the liability and equity features of its outstanding convertible senior
notes in a manner that reflects the Company's non-convertible debt
borrowing rate. The value of the conversion feature, reflected as a debt
discount, is amortized to interest expense over time. Accordingly, the
Company recognizes imputed interest expense on its convertible senior
notes of approximately 5.8% in its income statement. The Company
excludes the difference between the imputed interest expense and the
coupon interest expense of 3.25% because it is non-cash in nature and
because the Company believes that the Non-GAAP financial measures
excluding this item provide meaningful supplemental information
regarding core operational performance. In addition, the Company has
excluded 3 days of overlapping interest expense in connection with the
8.0% senior unsecured notes and deferred issuance costs associated with
the repayment of the line of credit. The Company has determined
excluding these items from the Non-GAAP measures facilitates comparisons
to historical operating results and comparisons to peers, many of which
similarly exclude this item.

(4) Amortization. The Company excludes amortization of patents
and acquired intangible assets because it is non-cash in nature and
because the Company believes that the Non-GAAP financial measures
excluding this item provide meaningful supplemental information
regarding operational performance. In addition, excluding this item from
the Non-GAAP measures facilitates comparisons to historical operating
results and comparisons to peers, many of which similarly exclude this
item.

(5) Tax (Expense) Benefit from Prior Years. The Company excludes
certain income tax-related items in respect of income tax audit
settlements and their related FIN 48 accrual reversals. The Company
believes that the Non-GAAP financial measures excluding this item
provide meaningful supplemental information regarding operational
performance. In addition, excluding this item from the Non-GAAP measures
facilitates comparisons to historical operating results.

The Company presents Adjusted non-GAAP Cost of Revenues, Adjusted
non-GAAP Research, Development and Engineering, Adjusted non-GAAP Sales
and Marketing, Adjusted non-GAAP General and Administrative, Adjusted
non-GAAP Interest Expense, Adjusted non-GAAP Other Expense (Income),
Adjusted non-GAAP Income Tax Provision and Adjusted non-GAAP Net Income
because the Company believes that these provide useful information about
our operating results and enhance the overall understanding of past
financial performance and future prospects.

j2 GLOBAL, INC. AND SUBSIDIARIES

NET INCOME TO ADJUSTED EBITDA RECONCILIATION

THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

(UNAUDITED, IN THOUSANDS)

The following table sets forth a reconciliation of Adjusted EBITDA
to net income, the most directly comparable GAAP financial measure.

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

Net income

$

31,376

$

33,770

$

57,196

$

63,713

Plus:

Interest expense, net

13,670

10,301

26,079

20,534

Other expense (income), net

1,592

(213

)

1,916

(87

)

Income tax expense

9,287

15,087

18,709

28,123

Depreciation and amortization

39,902

31,058

79,225

58,233

Reconciliation of GAAP to Adjusted non-GAAP financial measures:

Share-based compensation and the associated payroll tax expense

5,562

3,439

9,177

6,248

Acquisition-related integration costs

5,800

3,952

14,413

6,546

Additional indirect tax expense from prior years

3,007

150

3,007

900

Adjusted EBITDA

$

110,196

$

97,544

$

209,722

$

184,210

Adjusted EBITDA as calculated above represents earnings before interest
and other expense, net, income tax expense, depreciation and
amortization and the items used to reconcile GAAP to Adjusted non-GAAP
financial measures, including (1) share-based compensation, (2) certain
acquisition-related integration costs, and (3) additional indirect tax
expense from prior years. We disclose Adjusted EBITDA as a supplemental
non-GAAP financial performance measure as we believe it is a useful
metric by which to compare the performance of our business from period
to period. We understand that measures similar to Adjusted EBITDA are
broadly used by analysts, rating agencies and investors in assessing our
performance. Accordingly, we believe that the presentation of Adjusted
EBITDA provides useful information to investors.

Adjusted EBITDA is not in accordance with, or an alternative to, net
income, and may be different from non-GAAP measures used by other
companies. In addition, Adjusted EBITDA is not based on any
comprehensive set of accounting rules or principles. This Adjusted
non-GAAP measure has limitations in that it does not reflect all of the
amounts associated with the Company's results of operations determined
in accordance with GAAP.

j2 GLOBAL, INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

Q1

Q2

Q3

Q4

YTD

2017

Net cash provided by operating activities

$

51,191

$

60,464

$

—

$

—

$

111,655

Less: Purchases of property and equipment

(9,660

)

(9,285

)

—

—

(18,945

)

Add: Contingent consideration*

20,000

19,950

—

—

39,950

Free cash flows

$

61,531

$

71,129

$

—

$

—

$

132,660

* Free cash flows of $61.5 million for Q1 2017 and $71.1 million for
Q2 2017 is before the effect of payments associated with certain
contingent consideration associated with recent acquisitions.

Q1

Q2

Q3

Q4

YTD

2016

Net cash provided by operating activities

$

64,524

$

67,528

$

60,488

$

89,847

$

282,387

Less: Purchases of property and equipment

(4,321

)

(4,865

)

(8,261

)

(7,299

)

(24,746

)

Add: Contingent consideration*

8,000

—

—

—

8,000

Add: Excess tax benefit share-based compensation

264

833

974

200

2,271

Free cash flows

$

68,467

$

63,496

$

53,201

$

82,748

$

267,912

* Free cash flows of $68.5 million for Q1 2016 is before the effect
of payments associated with certain contingent consideration
associated with recent acquisitions. Amounts reflected were adjusted
from previously disclosed periods in order to be comparable to the
current period.

The Company discloses Free Cash Flows as supplemental Non-GAAP financial
performance measure, as it believes it is a useful metric by which to
compare the performance of its business from period to period. The
Company also understands that this Non-GAAP measure is broadly used by
analysts, rating agencies and investors in assessing the Company's
performance. Accordingly, the Company believes that the presentation of
this Non-GAAP financial measure provides useful information to investors.

Free Cash Flows is not in accordance with, or an alternative to, Cash
Flows from Operating Activities, and may be different from Non-GAAP
measures with similar or even identical names used by other companies.
In addition, the Non-GAAP measure is not based on any comprehensive set
of accounting rules or principles. This Non-GAAP measure has limitations
in that it does not reflect all of the amounts associated with the
Company's results of operations determined in accordance with GAAP.